Hunger for gold and lax government controls leads to safety shortcuts and risk to human lives

CEDHA Press Release

26 August 2010

San José de Copiapó, Atacama Desert, Chile - Thirty three Chilean miners have been trapped since August 5th, nearly a half mile underground and under roughly 5 miles of winding and precarious mineshaft tunnels, many of which have collapsed due to miscalculated drilling. And while a recent 6cm probe sent into the San Esteban copper and gold mine discovered they are alive, they may not see daylight for another 4 months, if at all.

While global press coverage centers on the intense efforts to extract the trapped miners alive, the real issue before Chilean mining authorities and for that matter, for most mining authorities around the world, is that private mining companies systematically cut safety corners in order to reap bigger and quicker profits, placing human lives at great peril. Meanwhile, government agencies tasked with controlling private mining to ensure avoiding health and safety risks, are generally working to promote mining investments, and rarely worry about preventing tragedy, reacting only once accidents occur.

Working conditions in underground mines in Chile and around the world are notoriously precarious. The mine which collapsed this month had no escape routes and had previously been closed due to bad onsite working conditions. In particular, the San Esteban mine has had a history of accidents, with 13 fatalities on site, and several others on nearby roads.

The San Esteban mine, which employs some 150 workers, is owned and operated by a local private company called Compañía Minera San Esteban Primera. It is one of three mines in the immediate vicinity producing a combined 1,200 metric tons of refined copper as well as gold.

Chilean congressman from Copiapó, Antonio Leal points to past accidents of the mine, and claims the owners Marcelo Kemeny and Alejandro Bohn (owner of 70% of the mine) took dangerous shortcuts with respects to worker safety. Prior protests from local worker unions called for introducing ventilation ducts, access ramps, reinforcement of tunnels, safety lodges and emergency exists, none of which were carried out. Leal had been engaged in pushing for more safety in the mining sector, including at the San Esteban mine.

Chilean President Sebastian Piñera has relieved several high level mining authorities of their duties at Sernageomin, the State agency responsible for mining safety, ousting its' director Alejandro Vio. Mining Minister Laurence Golborne has called for a full investigation into the accident. However, Leal points to lacking state controls over mining safety, and sites that the State comptroller has a very limited budget and meager infrastructure, and can only visit 60% of mining operations and even that only once a year.

Despite a near 10-fold investment in mining over the past 30 years, the comptroller's office, Sernageomin has the same staff and infrastructure as it was given back in 1980 when it was first created. According to Leal, the State's capacity to control mines like San Esteban, are simply not up to par, which leads to mine owners taking safety short cuts in order to increase profits.

Workers nonetheless depend on mining income and continue to flock to dangerous mines in search of employment. One of the trapped workers, in a letter sent up to the surface as the probe perforated the 800 meters between him and salvation, vested his firm belief in the company to get him out, stressing that the company has big machinery which can dig them out. It is believed that the collapse of the mine was worsened by miscalculated drilling, which lead to additional collapses, further trapping the miners inside their living tomb.

The lack of State controls over mining are symptomatic not only for Chile but also for neighboring countries like Argentina and Peru, where private sector mining takes place largely free of State controls, or with the blessing of very pro-mining government secretariats, which are willing to turn a blind eye on private sector irresponsibility.

Families of some of the trapped Chilean miners have launched a legal battle against both the company that owns the mine and the government inspectors who allowed it to reopen two years ago despite concerns over safety.

A judge has ordered the courts to freeze £1.2m assets of the Compania Minera San Esteban - the relatively small company which runs the gold and copper mine where the men are trapped - to cover any future compensation claims. Relatives say they not looking for financial compensation but instead want people to be brought to account for the mine's collapse. Yet figures within Chile's mining industry have accused the family's lawyers of conducting a "witch hunt" that, they say, could threaten productivity in the world's largest copper exporter.

"I'm not thinking of monetary compensation," said Carolina Narvaez, the wife of trapped miner Raul Bustos, according to AFP. "I'm thinking of holding people responsible."

Chief amongst the lawyers complaints are accusations that the mine was allowed to be reopened two years ago after a fatal accident which killed two workers. They also accuse the company of accumulating 42 fines over a six year period from various safety bodies for failing to protect its workers.

Remberto Valdez, a lawyer acting on behalf of some of the miner's families, told reporters: "I can't imagine why - when the mine hasn't met the minimum safety requirements of the Chilean [state] mining company - a specialised service for the Chilean government would allow the mine to operate against the interest of the miners?"

Edgardo Reinoso, a lawyer representing 26 families, said someone had to be held responsible for what had happened. "Luckily they are alive, but the harm that the situation has caused for them and their families is huge," he said. "We have found assets, there is money coming in, and we asked the judge in Copiapo that it be withheld as a precautionary measure."

The company has warned workers that it may have to file for bankruptcy and would be unable to pay the trapped miners their salaries let alone damages from lawsuits. They have been lobbying vigorously for government help to keep the mine open and its workers in full time employment.

Meanwhile, Jorge Pavletic, a board member with the national mining society and industry leader in the mineral-rich Antofagasta region, accused authorities are "overreacting" over safety. "This is a witch hunt that needs to end," he said.

Chile Government To Create Mining Regulator--Mining Minister

Dow Jones Newswires

27 August 2010

SANTIAGO - In light of the accident that has 33 miners trapped underground in a northern Chile mine, the government Friday announced it will create a mining superintendency to regulate and enforce safety standards.

The August 5 accident revealed that, while safety standards at the country's largest mines are very strict, those at small and midsize mines don't always meet the norm.

The country's national geological service, which is currently in charge of enforcing mining-safety standards, has a very limited budget and fewer than 20 inspectors to review all of the country's mining operations.

In addition to creating the superintendency, the government will increase the service's budget to allow for 45 inspectors so that mines may be policed about three times a year, instead of the current once a year, Mining Minister Laurence Golborne said.

"The government is taking these measures so that accidents such as the one that occurred at the San Jose mine will never happen again," he told reporters.

Chile's economy is highly dependent on the mining industry, as it represents about 20% of gross domestic product.

High copper prices lead to the reopening of unsafe mines - expert

By Victor Henriquez

Business News Americas

31 August 2010

High copper prices have led to the reopening of unsafe mines in Chile, increasing the likelihood of accidents such as the cave-in at the San Jose operation in northern region III, Juan Luis Ossa, head of a recently created special committee on safety regulations for the sector, told BNamericas.

"A lot of mines are closed when copper prices go down, but when prices go back up, they are reopened in the same conditions they were left in, leading to problems such as the one at San Jose," Ossa said commenting on the August 5 cave-in that still has 33 miners trapped 700m underground.

"Our responsibility is to prevent these kinds of accidents. And if the owners don't comply with safety regulations for their workers, we have to punish them drastically," said the lawyer who took part in the drafting of Chile's current mining code. "Workers deserve our attention and we need to provide a proper system to take care of them."

Ossa added that the San Jose accident will help improve the country's knowledge of mining activities. "Chile is a mining power worldwide. However, people have no idea of what the industry really means in terms of its complexity and contribution to the country's development."

The committee Ossa is leading will have 90 days to review the current regulations and prepare a report with recommendations on what needs to be done to improve safety conditions in the industry.

The Chilean president's handling of the accident that has seen 33 miners trapped has pushed his approval ratings to a new high and could help him to push through a proposed increase in mining royalties

By Molly Rosbach

Reuters

2 September 2010

SANTIAGO - Chilean President Sebastian Pinera's approval rating surged to a new high in August for his efforts to rescue 33 miners still trapped but alive weeks after a cave-in, and it could help him push through a mining royalty hike.

A new survey by pollster Adimark GfK showed Pinera's approval rating rose to 56 percent in August, up 10 percentage points from a previous poll in July -- the conservative billionaire's highest rating since he took office in March.

Images of the miners, bearded after nearly a month stuck 2,300 ft (700 metres) underground, their torsos bared to cope with heat, have captivated world attention, and Pinera moved fast to pledge reforms to mining safety in the world's No.1 copper producer

The jump in approval could give Pinera's government the upper hand in its push to pass a mining royalty overhaul through the opposition-led Congress.

The bill, revised and resent to Congress this week after the royalty was rejected by center-left opponents in July, calls for higher levies from global miners like BHP Billiton and Xstrata.

Pinera, who has angered mining companies with his proposal, expects the new royalty scheme to raise around $1 billion over the next three years to help finance rebuilding of cities ravaged by a massive Feb. 27 earthquake.

The poll had a margin of error of 2.7 percentage points and interviewed 1,315 people in the country's main cities. (Editing by Alonso Soto and Jerry Norton)